tv Nightly Business Report PBS May 8, 2012 1:00am-1:30am PDT
>> this is n.b.r. "nightly business report" >> susie: good evening i'm suey. >> >> tom: i'm tom hudson. new worries about the government debt troubles. >> susie: and who will succeedw. the million dollar question that went unanswers at berkshire hathaway's meeting. >> tom: we begin with oil prices. there is uncertain economy in the global oil market. crude figures fell for the fourth straight session. dropping 55 cents a barrel. now this drop in oil prices is
clearly great news for drivers and the u.s. economy. suzanne pratt reports. >> the slip and slide in oil prices continue today. this time europe in it's bibig political changes were behind the investor selling. >> now with the election results we skau over the weekend they're concerned the measures that they would help europe will not come to pass. >> also the worry with the sell off is worries of the u.s. economy, and an easing of tension with iran. crude oil futures have dropped 7 percent in the last week and prices are $12 be low the february high. some predict the decline will last. >> i think we would go as low at 90 =tkrarz and prices won't go back up. >> the drop in crude prices should show up in gas prices for
the summer driving season. that's great for consumers. >> gasoline is the biggest component for drivers. it makes a difference in solid growth in real spending and weak growth in real spending. >> more cash should be available for other things as the economy could really use a boost. suzanne pratt nbr, new york. >> susie: still ahead oraclewint google. we look at what it means for tech companies and their investors. announcer: nightly business report is brought to you by ... >> smart global investing requires expertise from the ground up. we have a unique perspective on global investing. gain from our perspective. >> susie: a changing governments
have little impact on wallstreet tom. -- on wallstreet the dow fell almost 30 points. the nasdaq road 1.5 and s & m up half a point. >> not much reaction here in the united states. european leaders talked up the need for more economic growth today. darren gersh reports the likely forecast is more uncertainty. >> for only the second time in 50 years a socialist has been elected president of france. francoise hollande's victory this weekend is a clear rejection of the measures put in place to jolt the euro. >> this is an a cute phase of the silver and debt crisis.
>> two main parties that had managed the party through the debt crisis emerged from parliamentary elections with less than a third of the combined vote. that could leave greece in limbo unable to form a new government. >> greece and france have rejected what is going on and how the incumbent leaders have dealt with the debt crisis. >> this is a potent gentially disrupt full mix for markets. >> jittery and uncertainty higher than ever. >> this is following an ominous pattern. those looking to clean up problems could lead to years and decades of growth. there is a fear there will be a spill over to the united states. >> the u.s. has a fiscal problem. but it's a medium to long term. in aoeurp we have short-term
crisis management. >> anti-bail out parties were big winners in the greek elections and have called to look over terms. darren goer ish of the business report, washington. >> susie: a verdict in a highprn google l. doing what and oracle. it was ruled google infringed on oracle's copyrights. they couldn't decide if google's use was "fare use." the size of the damage is not clear tonight. oracle wanted as much as one billion dollars. joining us with more analysis is julie samuels staff attorney at the electronic frontier foundation. julie, thank you for joining us. it sounds like this case is far from over. what happens next? >> susie, that's right. this case is far from over. this is one part of the first
phase. right now the jury and the court is considering copyright. what oracle claims doin google infringed a program called api. it's not clear if you can have a copyright on that. the court needs to decide if there is a valid copyright. the jury says maybe google infringed and maybe they didn't. >> susie: google's lawyers sayta miss trial and oracle saying they want a share of google's profits. what do you think the judge will say? >> there is a lot of steps left in the process. first a judge has to decide if you can get a copyright on this programming language we're talking about. also the jury punted on this issue, like you said is this a legal fare use. if this is found to be a legal fare use then google doesn't infringe. there there is the issue of
patents. that's the next phase. after those two phases if google is found to infringe then there is a third phase to decide on damages. >> before we get to phase two and three, looking at phase one. who won and who lost? looking at investor reaction and the charts here. google stock was up 2% after the news came out. oracle was down by as much. did investors get it right? >> i think they did. on the one hand while oracle got a tiny victory the jury found google may of infringed on the copyrights. the fact that the jury couldn't agree if the use was fare is a big deal. if the use was fare as google claims it didn't in fridge the copyrights. >> susie: quickly what are thebh companies? >> we are looking if the
programming, the apis are copyrightable. if they are i think it's a dangerous precedent that would allow companies to insert intellectual property rights and take licenses to use languages. i think that would be dangerous and consumers would feel the down stream effects of that. >> susie: it's a complicatedcas. thank you, julie sam rules, attorney. >> thank you. om: it could be a long hot summer of hanging out for many american teenagers. almost one in four teens were
unemployed in april. the teenage unemployment rate is over 20% now for more than three years. so, all this week on nbr we're looking at the summer job market for the youngest workers. why summer jobs are important for companies, teenagers and young adults and how hard it is to find a job this summer. with these odds it's no wonder some teens are building their own jobs. >> it won't be tough to find kids shooting hoops this summer. for andres cardona that's his job and company. >> two laps around the court. make sense. >> andres cardona is 18 years old. he started the south miami basketball academy two years ago in his high school entrepreneur class sponsored by a network teaching entrepreneur ship. >> i was laying down one night. i envisioned everything how i wanted it to be. i started with 12-15 kids
stretching and warming up. the basket balls and paper. five months later it was deja vu. it was same exact basketball court i envisioned it. wow, i made it happen. >> tom: how andres cardona made it happen was a mix of passion and mohr. he was making the equivalent of $3.50 an hour at first. after passing out brochures and talking with parents and players more showed up. he has four session a week with 60 students. his goal this summer is to have 100 students playing basketball. >> ladies and gentlemen, let's get started. >> he began his academy at john a. ferguson senior high school in miami. his student remembers a student who was rambunctious and asked a lot of questions. >> he loves basketball. 's, eat, sleep basketball.
i thought would be great. he has lots of talent. i said great businesses start from passion. when you have a passion for something you, you just do well. >> tom: today the academy brings in up to $3000 a month. even a third of the players can't afford to play. >> from this avenue to there they go to college and university. from this side they drop out and get in trouble on the streets. i don't want to see that. >> tom: making his own opportunity. tomorrow our series continues with a look at college students and internships. they were the first step to getting hired. now fewer companies are hiring after the internship is over.
>> susie: the know, tom,investog sell off today in the markets after the election chaos in europe you talked about at the top of the program. now look it ended kind of muted. people figured it will work itself out somehow. >> tom: maybe the markets had an idea about the you're pan elections. we can't see a lot of reaction, suzy. not a reaction in the u.s. worries about commitments to government spending cutbacks. here is the chart showing it for the s&p 500. in the green by midday and finished with a fractional gain. the muted response can be seen in the best performing sectors.
not much reaction going on over all. now weighing on the financial stocks aig will be selling $5 billion worth of stocks. after the sale the government will own 63% of the insurance giant. the government plans to sell at $30.50 a share below the closing price down 3% volume. trading very heavy today. the tech sector was the weakest over all. cognizant technologies kit their future out look due to less tkphapsdz of banks. the stock saw a lot less demand. lost a fifth of the over all value. volume was huge at 18 times average. the first time in four years they pointed to weaker business from banks for the disappointing forecast. how about abbott labs? they will pay a $1.6 billion
fine. this ends the case of promotion of a antiseizure drugs. it's the second largest fine paid by a drug maker, but the latest against pharmaceutical companies. >> going forward based on this fine and other fines we have seen across the industry i think the pharmaceutical industry will be more on target with marketing and target the marketing towards approved indications. >> ab so the shares were able to move up a fraction. the company put aside $1.5 billion last year anticipating the fine. the fine equal to the revenue of the drug to abbott for one year before losing their patent. vertex pharmaceuticals shot up 55% after positive data on a cystic fibrosis drug. it was suggested vertex could
have a move. in the years ago. >> tom: - the company reported profits but down from a year ago despite strong sales of the mass affect video game. the stock has been trending lower since november. down about 7% in afterhours action. take a look at our market. we have actively traited ets all frac agency lehigher lead by flx up by more than half of a percent. that is tonight's market focus.
>> tom: a political uncertainty in europe, job growth here, slow in china. this fuels bonds. lindsey bell is with us tonight. the yield on the ten year bond dropped today. does this represent a bubble in bond prices. >> -- the interest rates have declined. they went from 2.4% to below 2% today. the reason for that is bays european concerns reemerged. we heard from corporate america, and we got mixed economic data
from the u.s. they're driving prices up come yields down. >> tom: we have seen this for a long time. better part of 30 years the bonds yields flowing from the double digit highs from the early 80s. a lot of folks are talking about a bond market bursting. not whether or not it happens but when does it happen. >> that's right. this isn't a new story. we have seen this over 30 years. over the past 30 years we saw interest rates on the ten year go from 15% down to nearly zero right now. so, the bond markett has really been able to return -- has been able to give investors a return of 8% to 9% over the last 30 years because interest rates were declining and that tphrubg stew aeutsz the bond. >> tom: sure. >> now the fed has committed to
leaving interest rates at about 0% through 2014. we heard from them about two weeks ago. we saw a few members of the fed turn a little more hawkish. if we get any momentum in the economy we could see interest rates increase. >> tom: right. >> tom: that point who is more at risk, a bond investor? or bond mutual fund investors or etf? >> the mutual bond and etf investors are more at risk. bond investors can trade a round a bit. a mutual fund is more like a stock than a bond. it doesn't have a maturity and you're not guaranteed principal that. they will go down and it's harder for the portfolio manager to get returns. >> tom: lindsey, we will leave it. there you can read the art
thestreet.com. lindsey bell, thank you so much. >> thank you. >> a diane eastabrook in joel et, illinois. coming up tomorrow are corporate profits leading to labor unrests. >> susie: an up beat aroundyou'n buffett over the weekend. the stock climbed almost one and a half percent. one serious topic hung over the crowd of 35,000 shareholders. >> this is what warren buffett loves to do at his annual meeting. playing games. especially when it means -- bill gates at newspaper tossing. sampling new treats. mingling with his fans and leading a cheer. for most of us in the media keeping up with buffet at what
he calls "the woodstock for capitalists" is exhausting. this year we learned the high energy oxygen aryaarian is huma. he revealed news that he has prostate cancer and his diagnose sis a non event and doesn't plan to miss work. >> you look great. >> i feel great. no manifestation of any kind. >> his upbeat attitude reassured investors. >> he seems very healthy and reinforces he has a big backup and it's a non issue. >> he seems to be in good health. this comes along as you grow older. he's taking it in stride and the necessary precautions. >> the cancer news brought renewed questions about success. who will run berkshire after buffet is gone? he says the ward has picked a
individual to succeed him and two backup choices. those in the know speculate the leading candidates is ajit jain who runs the insurance division, matt rose the skr-rbgs eo of northern - radio, tony nicely of geico or greg abe hr-frpblgts buffet says there is a reason behind the secrecy. >> if we said who it was today and we bought a company with a wonderful ceo that person could be the number one candidate. >> uncertainty weighs on berkshire's stock. money managers are divided on what happens to the stock once buff set tkpwofpblt. >> i think it's a big issue and means a lot to the stock. no way anyone can do what warren
buffett has done over the past 47 years. >> berkshire hathaway hags established value for 30, 40 years. that won't change. >> most say whatever happens they're big believes in berkshire hathaway and the oracle of open omaha. >> i'm not concerned. he has a team lined up. >> 525,000 percent appreciations since the creation of berkshire hathaway. that's pretty dog gone good. >> a lot of happy investors. there. >> after the meeting i had a few minutes to talk to warren buffett in omaha. i asked him for his take on the u.s. economy. >> the economy has been improving steadily but slowly since the fall of 2009. it's been quite consistent in
that. people sometimes get bullish and all this. actually the economy is moving upward but not a rapid pace. that's the situation and won't change. i think it will keep improving but not rapidly until housing comes back. >> berkshire has so many businesses tied to housing. what will it take to get a significant recovery in housing? >> it will take more households than houses being built. getting the inventory of unsold houses back to a normal level at which point houses produced will equal household formations and you will ploy more people. >> a lot of questions on what is going on in europe. what's your take on the impact on our economy and pharbgtsz. >> europe is important to us but they're not predicting our future. in 15-20 years ago they will do fine.
so will we. there could be disruption between and there may be. i don't think it will stke rail the u.s. economy. >> the stock market is doing okay this year. are stocks a traffic tick to you? >> yes. you have to choose among assets. keep money in your pocket, savings account, a lot of things. i like productive assets. i like to own businesses and pieces of business called stocks. >> a berkshire hathaway stock has lagged the market the last few years. why not pay the investors a dividend to repay money to shareholders? >> we think we can use is effectively and have been using it effectively the last few years. we have five businesses i enumerated in the report that will probably make $10 billion pretax. seven years ago we had one. when we can add $9.5 billion in
acquisitions in a seven year peer we think there is a lot of opportunity ahead. >> so the buffet rule is getting a lot of debate. how do you feel about the tax issue with your name on it being the enterpiece of the presidential election. >> i was home hoping to get a disease named after me instead. since i have to settle for a tax rule i'm glad it's attached to this. it's a rule that basically stands for fairness. i hope our tax code gets more fare. >> do you think it will pass. >> it lost in the senate. it will come back. the american people basically favor it when they realize a third of the 400 richest or people of the highest earnings in the united states in the most recent years, a third of those paired a tax rate counting payroll taxes of less than 15%. i think something will happen. >> well, a lot of good advice there, tom.
he talked for six long hours at that meeting. >> tom: good stuff, susie, from omaha. we appreciate you watching, everybody. see you on-line and back here tomorrow night. announcer: nightly business report is brought to you by ... >> investing takes perspective. it comes from navigating up and down markets for 60 years. spotting taopbts at home and a broad. global investing ... gain from our perspective. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org